Silver Rivals Gold as Precious Metal of Choice
Posted by Luis Marini on Tue, Dec 21, 2010 @ 08:46 AM
Gold has been the “golden child” throughout 2010, with record-high prices reaching more than $1400 per ounce in early December.
In recent weeks, silver, sometimes referred to as the “poor man’s gold,” has caught the attention of investors and the general public alike. With its powerful price performance as a result of industrial and investor demand, the precious metal is likely to keep climbing in price in 2011.
All That Shines is Silver
While both silver and gold can be purchased as bullion and coins, and even in futures, there are several differences that impact its popularity with the industrial and investment communities.
From an investment standpoint, silver, like gold, can be purchased
as a store of wealth during unstable economic times. Because the cost of silver is significantly lower than the cost of gold, silver is a more appealing option for those that may not be able to afford gold. Leading up to Dec. 17, 2010, silver futures were up 71 percent in 2010, making silver an impressive investment option for both novice and experienced investors.
It is important to note that, historically, silver is extremely volatile due to low market liquidity, and fluctuations in demand from both the investment and industrial sides. When demand is high, silver can experience a significant increase in price; consequently, silver’s price can be negatively impacted even more so than gold during a recession.
Industrial demand is a key factor driving the price of silver. Silver is a solid conductor of electricity, and is used in the development of medical equipment because of its anti-bacterial properties. According to Bloomberg.com, new applications of silver in the coming year could “underpin 80 percent of the demand” of silver.
Silver’s Bright Future
The demand for silver outweighs current supply, and according to Bloomberg.com, the price of silver recently hit a 30-year high and surpassed $30 per ounce. Silver is expected to outperform gold in 2011, with the potential to reach $40 per ounce as a result of anticipated growth in industrial demand.
For those considering investing in silver, conduct research on the performance of silver to ensure that silver is the right investment option for you.
If you have unused, broken or scrap silver in your possession, now is a great time to sell your silver. With silver reaching record-high prices, individuals have the potential to earn high payouts for their scrap silver.
Is 2011 the year of silver? What is your prediction? The conversation continues below, so leave us your thoughts.
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Sources:
Wikipedia: Silver as an Investment